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Explain the conditions under which the forward exchange rate will be an unbiased predictor of the future spot exchange rate.
Answer: the conditions when forward exchange rate will be an unbiased predictor of the future spot rate is
a) If the risk premium is insignificant and
b) If foreign exchange markets are informationally efficient.
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Explain the significance of the term additional funds needed. While the pro forma balance sheet is completed, total assets and total liabilities and equity will hardly match.
how do we get the pvif of a perpetuity
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